Diodes Inc. reported financial results for the first quarter ended March 31, 2008. Revenue for the first quarter of 2008 increased 3.9% to $95.6 million, compared to $92.0 million reported in the first quarter of 2007. Revenue declined 11.2% sequentially, which the company states is due to the overall weakening of the global economy combined with seasonality, as well as the company’s foundry and subcontracting business, which showed greater weakness than its core revenue drivers.
Gross profit for the first quarter of 2008 increased 8.1% to $31.9 million, or 33.4% of revenue, compared to $29.5 million, or 32.1% of revenue, in the prior year quarter and 33.5% in the fourth quarter of 2007.
Commenting on the quarter, Dr. Keh-Shew Lu, President and CEO of Diodes Inc., said, "We continued to make significant progress during the quarter towards our strategic growth objectives. From a financial perspective, our first quarter results were sequentially impacted by the economic slowdown as well as weakness in our foundry and subcontracting business. However, we continued to demonstrate the success of our business model, which is built around the achievement of profitable growth. Our gross margin remained consistent compared to the fourth quarter due to our operational and manufacturing efficiencies."
Dr. Lu further commented, "Most notable, our quarter was highlighted by the announcement of our proposed acquisition of Zetex plc, a U.K. publicly traded semiconductor company, which we believe will further enhance Diodes’ global leadership for discrete and analog solutions. This acquisition will strengthen and broaden our product offerings, including entry with components into the fast growing LED lighting as well as the automotive market, expand our geographical footprint through increased exposure within the European market, and provide enhanced scale through a larger revenue base as well as manufacturing and packaging synergies and capacity efficiencies. We believe that Zetex fits perfectly into the profitable growth strategy we have consistently communicated to investors and further complements the strength and growth of our business. We look forward to reporting additional details regarding the future integration of Zetex into our business upon the pending close in June."
First quarter net income was $14.2 million, or $0.33 per diluted share, compared to $13.0 million, or $0.31 per share, in the first quarter of 2007 and $18.3 million, or $0.43 per share, in the fourth quarter of 2007.
Adjusted net income for the first quarter of 2008, which excluded $0.9 million of SFAS 123R net stock option expenses, was $15.1 million, or $0.35 per diluted share, an increase of 6.7% compared to the $14.2 million, or $0.33 per share, reported in the prior year quarter and $18.6 million, or $0.43 per share, reported in the fourth quarter of 2007.
As of March 31, 2008, Diodes had approximately $61.2 million in total cash, $302.6 million in long-term investments, $144.5 million in working capital, $237 million in long-term debt (including the convertible note) and unused and available credit facilities of $59 million.
